Diving Into CareTrust REIT’s Latest Virginia Acquisition

October 11, 2017, Steve Monroe, Senior Care Investor When CareTrust REIT announced a spate of deals at the beginning of this month, on top of an already busy year, one deal in particular stood out, mainly for the fact that it did not involve a skilled nursing facility.  With a couple of exceptions when the REIT purchased a few memory care communities in Wisconsin and Minnesota, 2017 has mostly seen a build-up of CareTrust’s skilled nursing portfolio, including 20 facilities in five transactions announced so far this year.

However, CareTrust bucked its recent trend and also acquired a portfolio of three assisted living communities in Virginia from Amerisist Assisted Living for an undisclosed price.  Located in Culpepper, Louisa and Warrenton (northeast Virginia), these communities totaled 73 units and 91 beds, and were some of the smaller communities in their markets, ranging in size from 21 to 41 beds.  They were built between 1998 and 2003, but that relative age didn’t hinder demand, as occupancy stood at 92%, based on beds.  Assuming normal operating margins, that must mean the communities were generating nice cash flow.

Taking over management will be Twenty/20 Management, with the communities added to its existing maser lease with CareTrust, which has a remaining initial term of about 13 years, two five-year renewal options and CPI-based escalators.  CareTrust’s relationship with Twenty/20 now consists of five properties in Virginia.  Josh Jandris, Mark Myers and Andrew Hilding of IPA Seniors Housing handled the transaction.